Last Updated October 16, 2023
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What is an Employment Offer Letter?
An Employment Offer Letter is a document that allows an employer to present a job opportunity to a new employee formally. Offer letters include essential employment details, such as a job title, start date, and compensation details.
An employer may require their new employee to sign and return the Employment Offer Letter confirming that they are accepting the position. Employers can also make offers conditional (also known as contingent), meaning employees must pass specific criteria before getting officially hired.
Our Employment Offer Letter template helps you easily create a letter for the next employee you hire. In addition to essential details, you can customize the letter to your company’s needs, including outlining probationary periods, working hours, and employee benefits.
An Employment Offer Letter is also known as an:
- Offer letter
- Job offer letter
- Letter of offer
- Offer of employment letter
- Employee offer letter
After using an Employment Offer Letter, employers should consider creating and signing a binding Employment Contract with their new hire.
When to use an Employment Offer Letter
Many employers, including small businesses, use Employment Offer Letters as a formal way to offer jobs to new employees before they sign Employment Contracts. After an interview, an employer may offer an applicant a job in person or by a follow-up phone call or email.
Afterward, the employer may provide the selected applicant with an Employment Offer Letter to formally offer them the position. In this case, the offer letter is a precursor to an Employment Contract. The offer letter gives the employee all the vital information they need to decide whether or not they would like to accept the position.
Alternatively, employers can use offer letters to hire employees who do not require a more extensive contract. Employers may utilize offer letters in this way when less formality is desired, the job description is less detailed, or the job responsibilities are less demanding. When an employer outlines an employee’s position with an offer letter instead of a contract, it may fall under “at-will” employment, which means either party can end the employment relationship "at-will" without notice or cause.
What is the purpose of an Employment Offer Letter?
An Employment Offer Letter has a variety of purposes, including the following:
- It allows you to present the most important job details
- It conveys professionalism to your new hire
- It serves as a starting point for negotiation if the selected candidate wants to discuss issues like salary or vacation
- It allows employees to confirm their acceptance
- It provides you and your new hire with a written record of the initial agreed-upon employment terms
How to write an Employment Offer Letter
When creating an offer letter for an applicant, there are some core details that you will probably include, including the following:
- The recipient’s information, including their name and address
- The company’s information, including its name, address, phone number, and email
- The job title for the position
- The salary or wage being offered, and the frequency of pay periods (e.g., monthly)
- The employee’s proposed start date
- Whether the position is full-time or part-time
Depending on the company and the nature of the position, there may be additional information that you would like to include within an Employment Offer Letter. For example, you may wish to specify:
- The working hours of the position (e.g., 9 am to 5 pm, Monday to Friday)
- The number of paid vacation days offered with the job
- Where the employee will work (e.g., at the company’s address or remotely)
- Whether it's a permanent position or a temporary job (e.g., internship)
- Whether there is a probationary period
- Whether there are any benefits offered with the job
- Whether the offer is conditional, and if so, what steps the recipient must complete
What is the difference between an Employment Offer Letter and an Employment Contract?
An Employment Offer Letter is similar to an Employment Contract in that they both contain all of the essential details associated with the position. However, unlike an Employment Contract, an Employment Offer Letter is not a legally binding contract.
What happens after an employer sends an Employment Offer Letter?
After an employer sends an Employment Offer Letter, they can require the new hire to sign the letter to signify both their acceptance of the job offer and their agreement to satisfy any preconditions your company requires of its employees, such as a background check or drug test.
If the new hire meets all of the conditions, the employer may use an Employment Contract to detail the full, binding agreement between themselves and the new hire. During the period of employment, the employer may use additional documents to manage their staff, including Employee Evaluations, Employee Warning Letters, and an Employee Privacy Policy.
Can an employer rescind an Employment Offer Letter?
According to The Balance Careers, American employers can rescind job offers for most reasons unless they are discriminatory. All states, except Montana, have employment-at-will laws, which allow employers to fire employees under most circumstances. Often, these laws apply to rescinded job offers as well.
However, even if an employer revokes a job offer without discriminating against someone, they can still face potential legal consequences. For example, if an employee can prove they have suffered losses because of a rescinded job offer, they may be able to sue for damages.
Companies may rescind job offers for a variety of reasons, including the following:
- The employee and employer cannot agree on employment terms
- The employee does not meet the requirements of a conditional offer
- The employee takes too long to accept the position and the offer expires
- The employer makes budget cuts or restructures the company, eliminating the offered position
- The employee displays unprofessional behavior during the hiring process or negotiations
